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PotashCorp looking to climb the food chain (ISCHY, POT, BHP)

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The monster miners are still looking for their invitation to get bigger in the agricultural business, which means buying potash producers. PotashCorp ( POT , quote ) itself is still a target, which is one reason it is hunting acquisitions of its own.

POT has filed to expand its stake in rival fertilizer manufacturer Israel Chemicals ( ISCHY , quote ) to a full 25% from about 14% today.

At today's prices, that 11% buy would represent around $1.4 billion, which cash-rich POT can definitely afford. After all, one of the goals here is to put some of the company's $15 billion in assets to work.

While POT could theoretically buy ISCHY outright, its de facto partner in the company -- Tel Aviv conglomerate Israel Corp. ( IRLCF , quote ) -- is unlikely to give up its 50% controlling stake without a fight.

The two companies could happily coexist as parents, and in the meantime the added heft would make POT itself a little less appetizing to BHP Billiton ( BHP , quote ) or one of its rivals.

A note of scale: POT is currently worth about $33 billion. BHP is five times as large in market cap terms, so could have easily absorbed even a giant in the potash space several times over.

If not for the Canadian government's veto, POT would be a BHP subsidiary by now.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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